Week 4 Page 1
Decision Models – Using Intuition to Make Decisions
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The use of intuition to solve a problem or make a decision may seem like common sense. However, this writer has a hunch, a feeling – almost a sixth sense – that presentiment may be good in a social setting or with our loved ones, but it is not so good in business environments. Why might that be so? Because our gut feel is fine with friends; we can use it to explain spontaneous actions or behaviors and they patiently entertain our reasoning. Conversely, in business, one better have more than a feeling about a course of action; one must have facts and data and proof of thorough analysis before one decides to dig a well for oil five thousand feet below the surface of a body of water. One cannot tell the senior leadership that “I have a hunch that there’s oil down there”; one must have proof. Business associates, customers and even competitors are not as patient of our guesses and opinions – especially when we are wrong. Therefore, it would seem there may be a time and place for intuition and a time and place to not use it.
What is intuition anyway? According to BusinessDictionary.com (2010), it is “an unconscious thought process that produces rapid, un-inferred knowledge or a solution. Though it is not analytic in the sense that it does not deliberately look for cause-and-effect relationships, intuition is not mere guesswork. Instead, it draws on previously acquired experiences and information and directly apprehends a totality. Intuition can be visionary or delusionary, uncannily correct or horrendously wrong in its conclusions.” By the way, there is an inherent difference between intuition and instinct: intuition is a gut feeling and instinct is a response. Therefore, one may presume that intuition is internal (it is not be visible to us) whereas instinct is external; we will see or hear the response, behavior action. This paper will address intuition and its use or misuse in a business setting.
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“Our desires powerfully influence the way we interpret information, even when we’re trying to be objective”, state Bazerman, Loewenstein & Moore (2002). Their research suggests we erroneously conclude that our judgments are free of bias – we aren’t even aware of the bias. In fact, their findings suggest that we have this unconscious bias and that it works by distorting how people interpret information (Bazerman, Loewenstein & Moore, 2002). Intuition may be the result of this bias, as our gut feel for something comes from using those past experiences we have and the experiences clearly affect (create biases) the way we reach conclusions.
There are certainly strong arguments for an intuitive approach, and Guterman discusses it in his article “Don’t throw good money (or time) after bad” (2002). His decision method of judgment heuristics is that of using simplifying strategies to make decisions in the face of incomplete data...